Adobe StockInverclyde has been identified by Lloyds as the most affordable place in the UK to buy a home.
Lloyds calculated that the average UK home costs around 7.3 times average earnings – the lowest price to earnings ratio since 2015 and down from 7.6 a year ago.
The bank said the rate of wage growth has outpaced house price increases over the past year, narrowing the affordability gap.
Lloyds’ calculations compared figures for April to June 2026 with the same period in previous years, using data from its house price index and Office for National Statistics (ONS) figures.
Although the comparisons looked at the second quarter of each year, Lloyds assessed all quarters and found that no other quarter had been lower than 7.3 for 11 years.
For first-time buyers, the average home costs just under six times earnings, with a ratio of 5.9, Lloyds said.
Northern Ireland bucked the general UK trend over the past year, with prices rising faster than wages, causing the average house price-to-earnings ratio to increase from 5.8 to 6.0.
The biggest improvements over the past year tended to be in regions where house prices were already relatively high compared with earnings.
The South East of England recorded a significant fall, with the average home costing 9.1 times earnings, down from 9.7 a year earlier.
In London, the ratio fell from 10.9 to 10.3, while in Eastern England it fell from 8.7 to 8.2 and in the South West it decreased from 8.2 to 7.7.
Despite the improvements in affordability, London and the South East remained the two least affordable regions.
Some locations with lower ratios recorded smaller decreases.
In Scotland, the ratio remained broadly unchanged at 5.3.
The ratio fell from 5.1 to 5.0 in the North East of England, while in the North West of England it fell from 6.5 to 6.3, and in Yorkshire and the Humber it edged down from 6.0 to 5.8.
The research pinpointed locations where homes are particularly affordable compared with average earnings.
Areas in Scotland topped the list, with homes in Inverclyde and Aberdeen costing 3.5 times wages on average.
Properties in Kingston upon Hull, Blackpool and Dundee cost 3.6 times earnings.
Elmbridge in Surrey was Britain’s least affordable local authority with a ratio of 17.4.
Kensington and Chelsea in London followed at 17.3, while St Albans in Hertfordshire was the third least affordable with an average of 14.1.
Lloyds did not include Northern Ireland in its more localised breakdowns due to small sample sizes.
Lloyds said that despite improvements to the price-to-earnings ratio, mortgage rate rises have pushed up mortgage costs.
Andrew Asaam, mortgages director at Lloyds, said: “There are some encouraging signs for people looking to buy a home.
“Wages have continued to rise while house prices have remained relatively stable, helping to narrow the gap between earnings and house prices.
“However, affordability remains stretched for many households.
“Mortgage rates are higher than they were a year ago and saving for a deposit continues to be one of the biggest barriers facing first-time buyers.
“Buyers may have more options than they realise, including mortgages designed for those with smaller deposits.
“While these won’t be right for everyone, they can help some buyers take their first step onto the housing ladder sooner.”
The Government recently unveiled a new scheme to help first-time buyers in England on to the property ladder.
The Your First Home initiative will give first-time buyers the chance to buy a new-build property with a 2.5% deposit, with the Government lending an extra 20% towards the cost.
Details will be outlined in the Budget and developers will also be expected to make a contribution when signing up to the scheme, to help cover costs.
Mr Asaam said: “For first-time buyers in particular, a small shift in location could make a big difference, not just in getting on the ladder, but in what kind of property is within reach.
“Many parts of Scotland and northern England continue to offer some of the best value relative to local earnings.
“For buyers with flexibility over where they live, that can make a meaningful difference to what they can afford.”
Here are the ten most affordable locations in Britain for home buyers, according to Lloyds, based on average house price-to-earnings ratios. The figures show the average house price followed by the average price-to-earnings ratio:
=1. Inverclyde, Scotland, £146,030, 3.5
=1. Aberdeen, Scotland, £147,851, 3.5
=3. Kingston upon Hull, Yorkshire and the Humber, £134,642, 3.6
=3. Blackpool, North West, £141,550, 3.6
=3. Dundee, Scotland, £152,072, 3.6
=6. Dumfries and Galloway, Scotland, £153,360, 3.7
=6. North East Lincolnshire, Yorkshire and the Humber, £138,543, 3.7
=8. Angus, Scotland, £160,928, 3.9
=8. Middlesbrough, North East, £139,678, 3.9
=8. East Ayrshire, Scotland, £162,459, 3.9
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